New York’s JPMorgan Chase — The Ultimate Bank Bellwether

If we want a bull market, JPM and others need to be in the game

It’s been a humbling year for JPMorgan Chase (NYSE:JPM). The firm that most adeptly avoided the worst of the financial crisis was shown to be mortal after all.

A multibillion-dollar trading fiasco hurt the bank’s vaunted reputation for risk management and left CEO Jamie Dimon with enough egg on his face to make a lumberjack’s breakfast.

But even after tumbling more than 20% in wake of its trading debacle, JPMorgan still was beating the broader market by 2 percentage points almost halfway through the year.

That’s key, because for the market to have any hope of sustained gains, JPMorgan has to catch a break. It’s hard to see how we could have a bull market without the financials participating, if not actually leading the way. And it’s even tougher to see how financial-sector stocks could succeed without JPMorgan pulling its weight.

It is, after all, the nation’s biggest bank by assets and a component of the Dow Jones Industrial Average with a mega-sized market cap of more than $135 billion.

Regulatory uncertainty, a global economic slowdown and the crisis in the eurozone make these perilous times for investors in financial stocks, and JPMorgan is as important a bellwether as any. For the sake of financial stocks and the broader market, the New York-based bank, with more than 260,000 employees around the world, had better thrive.

Check out the complete list of Real America Index components, along with an interactive map of short-term and long-term returns.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.